More would have been nice – the new visa places will only amount to a few hundred extra people, for example – but with the IT industry gripped by Brexit uncertainty, it should take what it can get for now.

However, the government continues to be fixated on tech startups as the way to boost the UK’s digital economy. They are important, of course – let’s not understate the benefits of building an even stronger base of innovative new companies. But to truly become a global digital leader, there’s a lot more to be done, and a lot more government can do.

One of the biggest economic problems the UK faces is its poor productivity – German workers could go home on a Thursday afternoon and still be more productive than British workers completing a five-day week. Despite efforts to address the issue, UK productivity decreased by 0.1% between April and June 2017, having fallen 0.5% in the first three months of the year.

This isn’t about firms being leading-edge adopters of new technologies such as artificial intelligence or internet of things, it’s about investing more in well-proven, established technologies such as mobile, cloud and e-procurement.

Shockingly, the CBI’s report said that UK take-up of enterprise resource planning (ERP) and customer relationship management (CRM) – two of the most basic, fundamental software building blocks for any modern organisation – is lower than it was in Denmark in 2009.

At the recent CBI conference, prime minister Theresa May challenged UK businesses to “embrace technological change”. In response, CBI director general Carolyn Fairbairn said government has a responsibility to “create the right backdrop for firms to invest”. Both are correct.

Outside of a relatively small number of innovative UK companies, there is an enduring technophobia that holds back British business and our digital economy. CEOs might have come to love their iPhones, but they are still reluctant to invest in the systems and skills needed to make their companies into digital exemplars. And post-Brexit, we really will need to be a country of digital exemplars.

The UK tax regime is still biased towards investment in goods and machinery – the heartland of a 20th century manufacturing base. There are fewer incentives to encourage spend on software and IT skills – the core of a 21st century digital world.

It will be great for Britain to be a global leader in tech startups. It will be even better for our global competitiveness if we can incentivise all businesses to become leaders in technology adoption.

There is a real danger that technology education in schools will wither and die, with all the risks that brings to the UK’s digital skills, research and innovation capabilities.

There was great fanfare in 2014 when the new computing curriculum was introduced and made mandatory for children from ages five to 16, replacing the old ICT course that was derided as simply teaching kids to use Microsoft Office.

After the first year of the new computing GCSE, the signs were positive – student numbers grew 11%. But only two years later, that growth has plateaued, with GCSE entries rising just 9% from 2016 to 2017 – that’s only 69,350 children taking the exam, barely 11% of the student population in the school year. ICT exam numbers have consistently dropped, down to 61,500 this year, and that curriculum is expected to be scrapped.

The problem isn’t only with students. The Royal Society found the English education system only recruits 68% of its target for computing teacher training courses – a lower success rate than courses to teach classics.

The UK government has rightly identified IT education as crucial to future economic success. The recent launch of the new T-levels is the latest hope. But so far in schools, IT education is not working.

The Royal Society is calling for £60m investment in computing education over the next five years – a tenfold increase to bring computing to comparable levels of support as maths and physics. With austerity ongoing, and Brexit on the horizon, you can’t see it happening.

For all the good words from government about digital skills, if we can’t get it right in schools, we won’t get it right in the workplace. It’s not yet a crisis but you can see a shadow approaching the horizon.

Employers, academia and government need to stop a potential crisis becoming a disaster that would harm the UK economy at every level.

If some parts of his speeches can be a little, well, repetitive, that can be forgiven in the light of the many digital initiatives that come under his remit. And no doubt his predecessor in the job, Ed Vaizey, might raise an eyebrow at Hancock’s recent description of himself as the UK’s “first ever digital minister” – especially since Vaizey claimed to have created the role, back in 2014.

Tory party rivalries aside, Hancock should be congratulated for throwing himself into the role with gusto. There’s one little problem though.

More than 90% of the delegates in the online straw poll said, “Hinder”. About 4% answered, “Help”. The rest weren’t sure.

That’s an overwhelming statement of the single biggest concern the UK digital sector is worried about at the moment. And yet, not once did Hancock mention or even acknowledge the Brexit elephant in the room during his talk.

He doesn’t avoid the issue entirely – in a speech to the Institute of Directors on 17 October, he said: “Pushing for a good deal for the tech industry is a core part of our Brexit negotiations.” You should hope so, too.

Computer Weekly is by no means the first, and we won’t be the last to say that we urgently need greater clarity on the UK’s post-Brexit future. The release this week of the list of industries covered by the Department for Exiting the EU’s Brexit impact assessments included IT, software and services, and telecoms – we’re all waiting to see if those critically important reports are published.

The government is right to put an emphasis on the digital economy as central to the UK’s future success outside the European Union – it would be just as central if we remained. But ignoring the genuine fears of the industry’s leaders helps nobody.

If Hancock is the cheerleader for our digital future, he needs to address the concerns of the sector with more than the standard government platitudes about Brexit – our technology leaders deserve to be offered clarity and confidence.

There’s an interesting story doing the rounds this week that highlights some important issues around the UK government’s aim to have a cloud-first policy for IT purchasing.

The original scoop, another good piece from The Register, said that HM Revenue & Customs’ (HMRC) decision to switch some of its cloud estate from a small UK cloud provider, Manchester-based Datacentred, to Amazon Web Services (AWS), sent the SME into administration.

The story was catnip for national newspapers eager to point out the juxtaposition of Amazon’s meagre tax payments to HMRC and the very same department choosing to give the US giant a significant contract at the expense of a plucky British SME.

However, according to a Computer Weekly source with knowledge of the situation, HMRC’s decision has wider implications.

It’s not unusual for a startup to lose money in its early years, but losing 50% more than it sold is rarely a sign of a healthy future. It seems unlikely HMRC was responsible for annual losses of £1.8m – although its decision to switch to AWS was probably the final straw that led to Datacentred’s demise.

Our source suggested that HMRC moved providers precisely because it saw the financial mess Datacentred was in – “basic risk management” as they put it.

In which case, you could argue that HMRC was wise to move to AWS when it did to avoid a critical cloud-based system being put in jeopardy.

The reality for startup UK cloud providers is that few will be able to provide the scale that a mega-department like HMRC requires over the long-term.

It’s a difficult Catch-22 for an SME – they won’t achieve scale without the support of large organisations such as government departments, but they can’t deliver the scale needed without over-stretching themselves financially.

The reality of the cloud market, long-term, is that only the global cloud giants will be able to service customers with such large-scale requirements. Smaller cloud providers will find their niche elsewhere.

While that might seem at odds with the government preference for purchasing digital systems from UK SMEs, the likelihood is that SMEs will ultimately benefit from the opportunities provided by departments using cloud for infrastructure and platform as a service (IaaS and PaaS) foundations, with SMEs providing services and software to build digital platforms that run in those cloud environments.

HMRC has also demonstrated the benefits of the cloud-first approach for government. It opted to use an open source solution in Openstack, using a modern microservices architecture rather than an old-school monolithic application, and as such it was able to “lift and shift” that workload to another cloud provider when it needed to.

Should HMRC decide in future that AWS is no longer its best option – whether for financial, technical or customer service reasons – it now has experience of migrating from one cloud provider to another.

Surely that’s in the taxpayers’ best interest?

UPDATE: 26 October 2017

MPs on the Public Accounts Committee (PAC) yesterday questioned HMRC CEO Jon Thompson over the Datacentred/AWS story, parroting the lines used by national newspapers around use of SME suppliers and the demise of the UK cloud provider.

As the transcript below reveals, Thompson said HMRC cut its cloud costs by 50% through switching to AWS, and also reiterated the point made by Computer Weekly’s source that an organisation of HMRC’s size is best supplied by one of the large, hyperscale cloud providers such as AWS or Microsoft Azure.

Meg Hillier (chair of PAC): Your relationship with Amazon and data services, you’ve changed contracts and now working with an Amazon company to hold HMRC data. Can you explain why HMRC did that and whether this flies in the face of the government’s proposal to contract with more small and medium sized enterprises (SMEs)?

Jon Thompson: So I don’t personally think there is anything wrong with HMRC contracting with Amazon Web Services and that’s indeed what we’ve done. If you wind back a bit and think about IT and HMRC, it was not that long ago that we had one enormous deal, if you remember rightly. More than £700m a year [for the Aspire outsourcing contract], and we decided to break that deal up, insource it all and then spin some of that back into the market. What that’s done is provide a range of market opportunities, and we think that’s attracted somewhere around 150 SMEs working with us now that wouldn’t have worked with us before, because we were working through that enormous deal.

Hillier: There are SMEs who lost their business as a result of you going with this [AWS], and why have you gone with a bigger contract on this particular aspect?

Thompson: There are two reasons really. One is… the market has moved on for very large businesses, and we’re a very large business, into what’s called hyperscale cloud. So you’re not just dealing in a cloud environment, you’re dealing with enormous businesses holding significant data. We need resilience in datacentres and we need someone who can hold all that data for us.

Hillier: So AWS is the only type of organisation that can have that level of resilience that HMRC needs?

Thompson: No, there are two. And the price reduction on this particular one was more than 50% for us, so there’s a clear value for money case for us moving down this route of scaling up the way in which data is held. We then come out of the datacentre business so we don’t have physical buildings ourselves, we get much more resilience because it can be held in multiple sites so if one goes down we don’t lose data and we don’t lose services.

Hillier: There is a government mission to increase the value of contracts let to SMEs to 33% of all contracts.

Thompson: I understand that. We are increasing the amount of business in relation to SMEs but in this particular case, an SME was not successful. I understand that you’re looking at the one that’s attracted publicity in relation to the loss as opposed to significant number of contracts that have gone to SMEs after the break-up of one single £700m-a-year deal.

For business, they see AI as the “silver bullet” that could reverse the trend that has seen UK productivity fall far behind our European competitors. Research from Accenture claimed AI could add an additional £630bn to the UK economy by 2035.

Ah, but this time it will be different, they say. This time it really will happen.

Fortunately, these naysayers are having an effect. Concerns about skills and jobs are being discussed in Parliament. The CBI has called for a joint commission involving, business, employee representatives, academics and government, to examine the impact of AI on people and jobs. IT suppliers will get there too, once they get over the excitement of all the money they expect to make.

One lesson from the history of technology innovation is that change takes longer than people first anticipate, but once it kicks in it happens faster than anyone was prepared for.

If society isn’t ready to absorb the impact, the advances stall – but it happens in the end. Look at the great dot com bust as an example – the internet really was as transformational as its pioneers said in the late 1990s before their businesses collapsed, it just needed everyone else to catch up and get used to the idea.

The same will happen with AI. It’s a welcome sign that the tech establishment is now discussing these issues – but for their hopes to be achieved, and without unnecessarily chaotic disruption, it’s a debate that needs to be extended to include the ordinary people whose lives it will most affect.

There’s no doubt that awareness of the risks and downsides of technology is becoming more widespread. Research this week from the Corsham Institute – a not-for-profit organisation that looks into issues around society and technology – highlighted the need for politicians, industry, and society to work together on gaining a better mutual understanding of the negative effects of the digital revolution.

Let’s face it, we know all these risks. We know we need to be better prepared. And while it’s true that technology moves faster than the law and politics can keep up with it, we already have perfectly good laws that outline our rights and responsibilities to fellow citizens that should apply to our online lives as much as face to face.

But change – especially on the scale of the digital revolution – is always an opportunity for those willing to exploit the cracks between those rights and responsibilities and when challenged, cry “You can’t stop progress”.

No you can’t, but you can make progress with more empathy and understanding – with an ethical approach to what you do, considering the social impact of what you do as much as the money you could make from doing it.

The global tech sector has never been in this position before – leading enormous change at the most basic levels of the way we live and work. It has a lot to learn. Google, Facebook, Uber and others are starting to see early glimpses of the backlash that could threaten their futures if they carry on this way.

It’s easy to say that the tech sector needs to step back and make ethics as much a part of the change it foments as the technology it creates. It’s much harder to make that happen.

But here, change has to start from the bottom – everyone in tech needs to ask themselves, what I can do to be more ethical, and to make sure the digital revolution is focused on the positive changes it can bring to our lives.

After all, during that time the proportion of women in IT has remained stubbornly stuck around the 17% mark – our latest salary survey shows that’s still the figure today. And over the past six years, we’ve seen a huge growth in events, awards, networking groups and public profile for these issues – all of which is welcomed.

Yet still nothing seems to change. Let’s remind ourselves of why this is so important.

Therefore, we need to target areas where we are not making the most of the available wider workforce – and that mostly means more women, and also more BAME, LGBTQ and people with disabilities, as well as tackling the institutional ageism that’s all too frequent in the industry.

It’s not just about jobs, though – it’s also about having a workforce that reflects the diversity of the technology users the tech sector seeks to serve. It’s about avoiding any further situations such as voice recognition systems that don’t work with women’s voices because they were developed and tested by men. And it’s about avoiding situations like this video that recently went viral – of an electronic soap dispenser that doesn’t recognise black skin:

So why aren’t more women joining IT? For a start, our salary survey shows there is a 25% gender pay gap – that’s huge. The average wage for a man in UK IT is £78,599. For a woman, it’s £59,209. That’s shocking, and has to be addressed.

The issue of women in tech has gained much greater profile recently, featuring in national newspapers. But read those articles and you’ll see they are all about examples of misogyny and sexism – mostly in Silicon Valley – and as such, only serve to give women more reasons to avoid the industry.

That’s not to have a go at men – many of whom genuinely wish to see change. But many men simply don’t realise their role in perpetuating the “male, pale and stale” image of IT. We need to educate men to change their behaviour, to bring diversity to the tech profession.

As British tech pioneer Karen Spärck Jones famously said, “Computing’s too important to be left to men”. We’ll keep bashing our heads until that brick wall crumbles.

It can’t be often that an IT leader decides to take a job because his or her new employer says it “doesn’t want to have an IT department”.

But it’s fair to say that Starling Bank – where that IT leader, John Mountain, is now CIO – isn’t your run-of-the-mill company with legacy systems and a room full of servers. Starling is a “challenger bank”, one of a new breed of digital-only entrants to the UK banking scene that’s appeared since the Bank of England loosened regulations.

As a startup, with no technical debt, it’s easy to take a different approach, but Starling is just the latest new organisation to offer a glimpse of what the corporate IT department of the future is likely to look like – or not look like, because there probably won’t be one.

As our recent interview with Mountain explains, digital staff at Starling are embedded in the business, part of multi-disciplinary teams focused on specific functions, products or services. But it’s not the first time we’ve seen this – nor is it an approach that needs to be examined over time to prove it works.

In retail, online-only firms such as Asos and Net-a-Porter have similarly been working with technology staff within business teams, alongside marketing, finance, product design and development people and others. Those companies would attest that such a setup has been instrumental in their ability to compete with high street giants and to be faster moving and more responsive to customer needs.

Starling, for example, starts from the basis that infrastructure is a commodity and runs everything in the cloud – an option not open to the online shopping firms when they were startups. Cloud is likely to accelerate the digital development of fintech startups at a greater pace than even retail.

The lessons are there for every IT leader in every organisation. If IT is meant to be part of the business these days, then why aren’t IT professionals part of the business too? The standalone IT department is dying.

At the start of the 20th century, most major US corporations employed a vice president of electricity. We’re at the start of a digital era that promises to similarly transform the way IT expertise is deployed.

She’s spent six years in senior roles at Microsoft, most recently at its Redmond head office near Seattle. Previously she was a CIO at BP for three years, and a CIO at GE for eight years. She is a role model for women in technology, and an industry influencer beyond her day job, recognised in independent lists of top tech leaders.

“Jacky Wright brings the skills we need to deliver on our commitment to transform HMRC into a world-class tax service,” HMRC told Computer Weekly. There seem to be few arguments against that statement.

However – as revealed by The Register – there’s potentially a big question mark over Wright’s tenure. She’s not actually leaving Microsoft. The software giant says she will be “on leave” while employed by HMRC – she is not leaving Microsoft employment permanently, like most of us would expect to do if we moved to a new job.

Not surprisingly, this has led to concerns over a potential conflict of interest for someone who will be only temporarily absent from one of HMRC’s and the UK government’s biggest and most important IT suppliers.

HMRC says she is employed on a two-year contract – nothing unusual there, her predecessor Mark Dearnley was on a three-year deal.

The department also says that when she leaves at the end of that contract, normal civil service rules will apply to any subsequent jobs she takes up. HMRC would not comment on whether it expects Wright to return to Microsoft at that time – but a Microsoft spokesman confirmed that the intention is she will return to the supplier at the end of her two years at HMRC.

Senior civil servants can require approval for any jobs they are offered for up to two years after leaving Whitehall. One of the reasons for doing this is “the risk that an employer might gain an improper advantage by appointing a former official who holds information about its competitors, or about impending government policy”, according to Cabinet Office guidelines. HMRC must surely be aware of Wright and Microsoft’s intentions.

HMRC told The Register that Wright “must recuse herself from any discussion and decisions relating to Microsoft, both within HMRC and across government and we will put in place the necessary governance to manage.”

Again, nothing new there – Dearnley was similarly recused from decisions related to his former employer, Vodafone, although the mobile operator is hardly as ubiquitous as Microsoft across government.

“When Jacky begins work for HMRC she will sever all financial, strategic and business connections with Microsoft,” said HMRC.

Computer Weekly put a series of question to HMRC over the governance of Wright’s recusal from Microsoft-related decisions:

HMRC has said Jacky Wright will be “recused” from any decisions relating to Microsoft – can you provide more details of the terms of that recusal and how it will be governed? For example, what is the definition of the subjects for which she will be recused?

What independent monitoring / oversight will exist to govern which decisions she will have to be recused from?

What, if any, agreements have been put in place between Microsoft and HMRC relating to Jacky Wright’s appointment?

What stipulations has HMRC made to Microsoft over any sensitive, commercial or confidential information that Jacky Wright may be party to as HMRC CDIO, which would otherwise be of commercial or other interest to Microsoft in its relations with government?

Again, HMRC declined to provide specific answers to those questions.

There are precedents – but they come from years ago, during an era that has largely been discredited when the government’s biggest technology suppliers dominated decision-making in Whitehall. At one stage, for example, an IBM executive sat on the board of the DVLA, so close was the relationship between the agency and its strategic outsourcing partner.

There is no suggestion here that anyone is impugning or doubting Jacky Wright, her ability or her integrity. But inevitable concerns over the potential for conflict of interest put her and HMRC in a difficult position – one that surely could have been avoided. Why not simply quit Microsoft, for example – or for HMRC to stipulate that she does? That wouldn’t prevent her rejoining the company subsequently – subject to civil service rules.

What effect will her recusal from Microsoft-related decisions have on her daily work? HMRC is moving to the cloud, for example – given Microsoft is one of the leading cloud suppliers, will she have to remove herself from any cloud-related purchasing decisions? Will she get access to confidential pricing information from Microsoft competitors such as Amazon Web Services or Google, which may be commercially sensitive when her “leave” from Microsoft is over?

What about Windows or Office 365 – you can imagine the outcry from open source advocates if HMRC makes new commitments to using such Microsoft products during Wright’s tenure.

But these are important decisions you want a top IT leader to be involved with.

HMRC has made what appears to be a fine appointment for a massively important job – one of the highest profile IT leadership roles in the UK, let alone the public sector. Wright brings with her an impressive track record and the skills to make a real difference.

It can only be a disappointment that the terms of her appointment raise so many extraneous question marks that could easily have been avoided. HMRC should provide more details of how its new CDIO’s work will be governed and the oversight put in place to avoid any conflict of interest or any impediment to Wright’s ability to do her job.

Slowly, technology issues are rising to centre of the Brexit debate – as they should.

This week saw the publication of the UK government’s Data Protection Bill – our implementation of the European Union’s General Data Protection Regulation (GDPR). Digital minister Matt Hancock hailed the bill as bringing UK data laws into the digital age and presented it as some marvellous new British concept in privacy, when in truth it’s simply our implementation of GDPR – something we have to do by May 2018 anyway because we’re still part of the EU.

But the bill is not all we need. The EU expects a formal data adequacy agreement with any third countries, and while GDPR compliance should in theory make that straightforward, it’s not yet guaranteed.